As expected, the RBA kept its settings unchanged, and we do not anticipate any movement in the near future.

The RBA was obliged to cut rates to 0.25%. It is right that monetary policy should be working in a co-ordinated manner with the government’s fiscal stimulus packages.

I believe the RBA was, on balance, correct to hold rates today – but it must have been a tough call.

While the decision to cut the cash rate by 25bp to 0.75 percent was priced into the market as a near certainty, the factors influencing the outcome were certainly not straightforward. 

The RBA was right to keep rates on hold at 1 percent today and leave any further cuts till later in the year.

By cutting rates, the RBA is sending a signal to the market, to politicians and to the community at large, that the Australian economy is not firing on all cylinders

The sluggish GDP figures, particularly the weakness in household consumption, shows the RBA would have been justified in cutting cash rates faster.

It seems inevitable the Reserve Bank of Australia will drop the cash rate in its meeting next week, and possibly again later in the year.

So, the Reserve Bank of Australia resisted growing calls to cut interest rates yesterday. They were right to do so.